Archive for the ‘Chart School’ Category

The “Average Stock” is Facing a Big Test Here!

Courtesy of Chris Kimble.

The Value Line Geometric Index tends to give investors a good idea of the health of the overall market. It is an equal-weighted index with a broad swath of stocks that gives investors an idea of how the “average stock” is performing.

The Value Line Geometric formed highs in the same area in 1998, 2007, and 2015 (see blue line). In the last two years, the index broke out above that line and held above it until the recent correction.

It is now testing the underside of that price area (now resistance). Bulls will get good news with a breakout ABOVE this resistance, while a failure BELOW resistance will be bad news.

Stay tuned. This is likely an important long-term price test for the average stock index.

This article was first written for See It Markets.com. To see original post CLICK HERE

To become a member of Kimble Charting Solutions, click here.





Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimble Charting Solutions, click here.





Homebuilders Set To Deliver “Canary” Message Again!

Courtesy of Chris Kimble.

There are often market “tells” that occur long before the beginning of a broader stock market rally or correction. And they tend to be sectors/areas of the market that are more sensitive to the economy… for instance, small cap stocks, tech/growth stocks, housing stocks, etc…

When a reversal pattern shows up for one of these sectors, it could be a pre-cursor to what’s coming for the broader market.

Homebuilders… Again?

The Homebuilders (XHB) started sending a bearish divergence message to the broad market in early January of 2018. It has been a leader to the downside over the past year, declining nearly 40%. 

While declining, XHB looks to have formed two falling channels marked by (1) and (2). The counter-trend rally has the homebuilders testing the underside of the falling channel (2) and recent highs at (3). I humbly feel we will get a very important message about where the broad market is headed, by how XHB handles resistance at (3).

Keep a close eye on the homebuilders, as it sent important topping signals at the 2007 highs and once again this past year.

Long stock positions DO NOT want to see XHB peak at (3) and turn lower!!!

This article was first written for See It Markets.com. To see original post CLICK HERE

To become a member of Kimble Charting Solutions, click here.





Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “flexible” and “patient” on the monetary policy.

The minutes from the recent Federal Reserve meeting were likewise “dovish”:

The release of Fed minutes revealed that some central-bank officials hard reservations about an interest-rate increase last month due to market volatility, though policy makers voted unanimously in favor of the move. They also recommended the Fed should be “patient” and stressed that “a relatively limited amount of additional tightening” is appropriate.

“The backdrop for stocks is positive, with earnings growth still projected to be healthy, while the Fed looks like it is pausing,” Michael Arone, chief investment strategist for State Street Global Advisors, told MarketWatch.

“Stocks are loving that central bank policy appears to be in an ultra-dovish mode,” wrote Edward Moya, chief market strategist at Oanda, in a note. “Inflation is low and under control and the main catalyst for the Fed’s ability to be patient.”

In economic news ISM services slowed much like manufacturing did the prior week with a reading of 57.6 from 60.6 in November – that is still highly expansionary.

For the week the S&P 500 gained 2.5% and the NASDAQ 3.5%.

Here is the 5 day weekly “intraday” chart of the S&P 500 … via Jill Mislinski.

The


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Cycle moves to profit from in 2019

Courtesy of Read the Ticker.

cycle-moves-to-profit-from-in-2019Every thing has a cyclical manner, some more than others. And when price and the cycle runs together, it great to be in it for the ride!

Of course fundamentals are the reason for a price move, yet the laws of nature seems to co ordinate fundamentals, price and time together, hence the outcome can be seen via a sine wave cycle.

If you use some math called ‘Bartels’ (more here) you can scan many sine waves periods to see if they fit into your price time series, each time series will have it’s own characteristics, some cycles will be a better with either a daily, weekly or monthly periods. Back testing the cycle is critical, as cycles do come into form and fall out of form, but over time they do add to the investors arsenal while working out the next risk reward price move. 

Consider these possible big movers in 2019.

Chart: Gold stocks to gold.

Click for popup. Clear your browser cache if image is not showing.
XAU

Chart: USD or DXY index.

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DXY

Chart: Crude oil

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OIL

There are some big moves coming in 2019, cycles help the investor judge each one. 


Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination
of Gann Angles,
Cycles,
Wyckoff and
Ney logic
is the best way to secure better timing than most, after all these methods have been used successfully for 70+ years. To help you applying Richard Wyckoff and Richard Ney logic
a wealth of knowledge is available via our RTT Plus membership.

NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net

Investing Quote…

..”I have yet to find a man, in or out of Wall Street, who is able to make money in (markets) continuously or


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“The Big Test” Looms – Bear Market Bounce Or Beginning Abother Bull?

Courtesy of Lance Roberts, RealInvestmentAdvice.com

Bull Rallies & Market Tops

Last week, we discussed the fulfillment of our expectations for a bull rally. While the rally was attributed to the rather “dovish” stance taken by Jerome Powell and commentary from the White House on potential progress on resolving the “trade war” with China. The reality is it had little to do with those headlines but was simply a reversal of the previous “exhaustion extreme” of sellers during November and December. 

The rally, as we laid out two weeks ago, continues to work within the expected range back to 2650-2700. 

Importantly, the previous deep “oversold” condition which was supportive of the rally following Christmas Eve has now been fully reversed back into extreme “overbought” territory. While this doesn’t mean the current rally will immediately reverse, it does suggest that upside from current levels is likely limited. 

Nonetheless, the rally from the December lows has been impressive. However, I want to caution investors from extrapolating a deeply oversold bounce into something more than it is.

Beware The Headlines

“The stock market just got off to its best start in 13 years. The 7-session start to the year is the best for the Dow, S&P 500 and Nasdaq since 2006.” – Mark DeCambre via MarketWatch

While headlines like this will certainly get “clicks” and “likes,” it is important to keep things is perspective. Despite the rally over the last several sessions, the markets are still roughly 3% lower than where we started 2018, much less the 11% from previous all-time highs.

Importantly, there has been a tremendous amount of “technical damage” done to the market in recent months which will take some time to repair. Important trend lines have been broken, major sell-signals are in place, and major moving averages have crossed each other signaling downward pressure for stocks. 

While the chart is a bit noisy, just note the vertical red lines. There have only been a total of 6-periods in the last 25-years where all the criteria for a deeper correction have been met. While the 2011 and 2015 markets did NOT fall into more protracted corrections due to massive interventions by Central Banks, the current decline has no such support currently. 

So, while there are many…
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“Approaching A Tipping Point”: Stock Rally Hits Key Checkpoint

Courtesy of Zero Hedge

After a furious, post "Mnuchin Massacre" rally that has seen the S&P index rise +10.44% over the last 11 sessions, the best such stretch since October 2011, every major US stock index is approaching a tipping point according to Nomura quants who caution that with the S&P500 near 2,600 and the Russell 2000 at ~1,450, we are near levels at which CTAs are forced to cut their loss-making short futures positions, and further note that they have already identified that mechanical buying back of futures by trend-followers is been gradually induced.

To be sure, the positive drivers such as progress in US-China trade talks and the Fed's dovish shift have significantly accelerated a recovery in sentiment, but in global stock markets, the current pattern in major DM equity market factor returns shows investors calmly remain in a conservative stance on risk-taking (rather than this being a superficial rebound). In fact, their preference has been tilted toward defensive-oriented factors such as low volatility (i.e., buying low-vol, selling high-vol names) or dividend-yield carry factors (i.e., buying higher dividend yield stocks and selling low dividend yield stocks). The cautious view is still very persistent under the surface.

However, a more notable observation for the viability of the recent rally is that according to Nomura, "we have reached a reality check in identifying the sustainability of the current risk rally" with the bank adding that its estimate of global stock market sentiment is aligned with the peaks seen last November and December. Note that in all prior cases, sentiment softened from around these market levels.

Even if the improvement continues, Nomura warns that additional positive events or drivers related to solid fundamentals would be necessary to push sentiment further into positive territory (i.e., a risk-seeking phase). Otherwise, one needs to be aware that systematic buy-back pressure on trend-chasing algo investors like CTAs and Risk Parity funds only will accelerate the upward momentum of the equity market.

One other key wildcard is what happens with China: while Nomura believes that the future momentum of the Chinese economy seems overlooked at the moment, it is one of the "reality check" factors. Removing US economic uncertainty is not enough, in Nomura's view, but at…
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S&P bulls hope Trump rally doesn’t end here, says Joe Friday

Courtesy of Chris Kimble.

Could Presidents Trump’s election rally be in trouble? We could find out very soon, says Joe Friday

This chart looks at the S&P 500 and the VIX index over the past few years. We applied Fibonacci to the price when President Trump was elected and the 2018 highs. The decline from the September highs hit the 61% retracement level, where a reversal and a quick 10% rally has unfolded.

The rally has the S&P testing the underside of its 2018 trading range, it’s 38% retracement level, and falling resistance at (1). While this is taking place the VIX index is testing rising support at (2).

Joe Friday Just The Facts– S&P 500 bulls want to see it break resistance at (1) and the VIX break support at (2). If it does break out at (1); it would send a positive message to the Trump rally. 

If the S&P peaks at (1) and turns lower, this would be frustrating news to S&P 500 bulls!

To become a member of Kimble Charting Solutions, click here.





Animal Spirits: Record Outflows

 

Animal Spirits: Record Outflows

Courtesy of 

Today’s Animal Spirits is presented by YCharts.

On today’s Animal Spirits we discuss:

The gap is closing between active and index

Can unemployment signal a recession

Some more unemployment numbers

J.P. Morgan’s Guide to the Markets

Stocks look attractive

Alphabeticity Bias

Credit Card Perks

Do women hedge fund managers outperform?

Tough year for Einhorn

Good year for Bridgewater

High earners living paycheck to paycheck

Millennials are delusional 

Listen here:

Recommendations

  • The Wealthy Barber
  • The Coddling of the American Mind
  • Impossible to Ignore

Charts mentioned

 

 

 

 

Tweets mentioned

 

Mention Animal Spirits to receive 20% off (*New YCharts users only).





A ten percent bounce in the S&P 500, now what?

 

A ten percent bounce in the S&P 500, now what?

Courtesy of 

What does it mean when the stock market makes a low and then stages a large bounce in a short period of time? Is that sort of price action meaningful? How should traders think about? How should long-term investors think about it? What are the signs that a big bounce will lead to a new high instead of a new low later on?

Michael Batnick and Downtown Josh Brown attempt to answer these questions the best way they know how – with context, data, historical information and common sense.

Leave us a comment below, and make sure to subscribe to The Compound if you haven’t already! We love your feedback and we love our subscribers.

Here are the charts we posted in today’s video:

 

 

The Compound (YouTube)





 
 
 

Phil's Favorites

Brexit: An 'escape room' with no escape

 

Brexit: An ‘escape room’ with no escape

Courtesy of Terrence Guay, Pennsylvania State University

Brexit is beginning to look a lot like an “escape room” with no exit.

An escape room is an increasingly popular adventure game that requires participants to solve a series of puzzles before they can leave the room and advance into another one with additional riddles.

Brexit now seems to be a riddle that can’t be solved, after U.K. lawmakers voted down Prime Minister Theresa May’...



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Zero Hedge

Is This The Real Reason Why Stocks Are Surging?

Courtesy of Zero Hedge

Wondering why US equity markets are soaring at a pace not seen since the March 2009 lows? Confused by the massive swings higher despite weak macro data, and tumbling earnings expectations?

Well, the answer is simple once again, "it's not the economy, it's the central banks, stupid!"

Q4 2018 saw global stock markets finally wake up to the fact that the world's central banks were withdrawing liquidity and played catch-down to an ugly tightening reality. December's contagion to American stocks was the final straw for the world's elites however  and after the Mnuchin Massacre, it appears the Plunge Protection was ordered back into battle...



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Kimble Charting Solutions

The "Average Stock" is Facing a Big Test Here!

Courtesy of Chris Kimble.

The Value Line Geometric Index tends to give investors a good idea of the health of the overall market. It is an equal-weighted index with a broad swath of stocks that gives investors an idea of how the “average stock” is performing.

The Value Line Geometric formed highs in the same area in 1998, 2007, and 2015 (see blue line). In the last two years, the index broke out above that line and held above it until the recent correction.

It is now testing the underside of that price area (now resistance). Bulls will get good news with a breakout ABOVE thi...



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Digital Currencies

Crypto-Bubble: Will Bitcoin Bottom In February Or Has It Already?

Courtesy of Michelle Jones via ValueWalk.com

The new year has been relatively good for the price of bitcoin after a spectacular collapse of the cryptocurrency bubble in 2018. It’s up notably since the middle of December and traded around the psychological level of $4,000... so is this a sign that the crypto market is about to recover?

Of course, it depends on who you ask, but one analyst discovered a pattern which might point to a bottom next month.

A year after the cryptocurrency bubble popped

CCN...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

http://www.insidercow.com/ more from Insider

Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



more from Chart School

Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>